Dalkic v Commissioner for Fair Trading, NSW Office of Fair Trading [2010] NSWADT 89 (9 April 2010)

Last Updated: 12 April 2010

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL

CITATION:
Dalkic v Commissioner for Fair Trading, NSW Office of Fair Trading [2010] NSWADT 89


DIVISION:
GENERAL DIVISION

PARTIES:
APPLICANT
Nursen Dalkic

RESPONDENT
Commissioner for Fair Trading, NSW Office of Fair Trading



FILE NUMBERS:
093138

HEARING DATES:
1 September 2009; 28 September 2009

SUBMISSIONS CLOSED:
6 November 2009



DATE OF DECISION:
9 April 2010

BEFORE:
Leal S - Judicial Member





LEGISLATION CITED:
Property, Stock and Business Agents Act 2002
Administrative Decisions Tribunal Act 1997
Corporations Act 2001 (Cth)

CASES CITED:
McDonald v Director General of Social Security [1984] FCA 57; (1984) 1 FCR 354
McBride v Walton (NSW Court of Appeal, unreported, 15 July 1994
Saglimbeni v Commissioner for Fair Trading, NSW Office of Fair Trading [2008] NSWADT 1
Clarke v Commissioner for Fair Trading [2004] 273
Davidson v Commissioner for Fair Trading [2004] NSW ADT 200
McDonald v Commissioner for Fair Trading [2004] NSW ADT 124
Smith v Commissioner for Fair Trading [2004] NSW ADT 182
Cross v Commissioner for Fair Trading, Office of Fair Trading [2005] NSWADT 69
Australian Broadcasting Commission v Bond [1990] HCA 33; (1990) 170 CLR 321
Frugtniet and Anor v Commissioner for Fair Trading; Commissioner for Fair Trading v Travel Action Pty Ltd and Anor (GD) [2004] NSWADTAP 12 (16 April 2004)
Young Taek Chong v Tomazin (1994) ASC 56-283

TEXTS CITED:


APPLICATION:
Property, Stock and Business Agents Act – Real Estate Agent – Licence refused – Disqualified person – Fit and proper

MATTER FOR DECISION:



REPRESENTATION:
APPLICANT
Nursen Dalkic
RESPONDENT
Commissioner for Fair Trading, NSW Office of Fair Trading


ORDERS:
The Commissioner’s decision is affirmed.


Reasons for Decision:

REASONS FOR DECISION

Introduction

1 On 12 February 2009, the applicant, Mrs Nursen Dalkic, applied for a real estate agent’s licence under the Property, Stock and Business Agents Act 2002 (‘the Act’). The application was refused on 21 May 2009 on the basis that Mrs Dalkic was a disqualified person and was not found to be a fit and proper person to hold a licence under the Act. This decision was affirmed following an internal review completed on 30 June 2009. Prior to the finalisation of the internal review, Mrs Dalkic lodged an application for review to this Tribunal.

Jurisdiction /Review decision

2 In this case, the Tribunal is undertaking a review of the merits of the original decision. The role of the Tribunal is to make the correct and preferable decision having regard to the material before it, including any relevant factual material and any applicable written or unwritten law. It then confirms the original decision, varies it, or sets it aside and substitutes another decision. (Administrative Decisions Tribunal Act 1997, s63) The Tribunal makes its own decision in place of that of the Commissioner of Police and there is no presumption that the decision of the Commissioner is correct. (McDonald v Director General of Social Security [1984] FCA 57; (1984) 1 FCR 354 at 357.)

3 According to section 3 of the Property, Stock and Real Estate Act 2002 (the Act):

"real estate agent" means a person (whether or not the person carries on any other business) who, for reward (whether monetary or otherwise), carries on business as an auctioneer of land or as an agent:

(a) for a real estate transaction, or

(b) for inducing or attempting to induce or negotiating with a view to inducing any person to enter into, or to make or accept an offer to enter into, a real estate transaction or a contract for a real estate transaction, or

(c) for the introduction, or arranging for the introduction, of a prospective purchaser, lessee or licensee of land to another licensed agent or to the owner, or the agent of the owner, of land, or

(d) collecting rents payable in respect of any lease of land and otherwise providing property management services in respect of the leasing of any land, or

(e) for any other activity in connection with land that is prescribed by the regulations for the purposes of this definition.

but does not include a person who carries on business as an auctioneer or agent in respect of any parcel of rural land unless the regulations otherwise provide. "

4 Section 8(1)(a) of the Act provides that a person cannot act as or carry on the business of a real estate agent unless the person is the holder of a real estate agent’s licence.

5 Section 9 of the Act requires a corporation to hold a corporation licence in order to carry on the business of a real estate agent.

6 Section 14(1) of the Act states that a person is eligible to hold a real estate licence only if the Commissioner is satisfied that the person:

(a) is at least 18 years of age, and

(b) is a fit and proper person to hold a licence and each person with whom the person is in partnership in connection with the business concerned is a fit and proper person to hold a licence, and

(c) has the qualifications required for the issue of the licence, and

(d) is not a disqualified person, and

(e) has paid such part of any contribution or levy payable under Part 10 (Compensation Fund) as is due and payable on the granting of the licence.

7 Section 19 of the Act provides that an application for a real estate licence must not be granted unless the applicant is eligible to be granted a licence under section 14. This means that if any of the eligibility criteria for the relevant licence applied for are not met by an applicant, the applicant’s application for that licence must be refused.

Fit and proper

8 Section 14(1)(b) of the Act provides that a person is eligible to hold a real estate agent’s licence only if the Commissioner is satisfied that the person is a fit and proper person to hold a licence.

9 The question as to whether a person is fit and proper was discussed in McBride v Walton (NSW Court of Appeal, unreported, 15 July 1994). Their Honours recognised that whether a person is fit and proper involves a value judgement to be made in the context of the particular activity to be licensed. The Court said that where there is evidence of misconduct, there should be consideration of any explanation for that misconduct, its seriousness to the particular activity, the motivation of the person, whether the misconduct is an isolated incident, the person’s underlying qualities of character, and the person’s conduct since the incident and whether this demonstrates recognition of the misconduct and subsequent reform. The question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur.

Disqualified person

10 The circumstances in which a person is a ‘disqualified person’ is set out in section 16 of the Act.

11 Section 16 (1A) (c) provides that a person is a disqualified person for the purposes of the Act if the person is, or was at any time in the last 3 years, concerned in the management of, or a director of, an externally-administered body corporate (within the meaning of the Corporations Act 2001) except in a case of the voluntary winding up of the body corporate.

12 The Corporations Act provides that an externally-administered body corporate means a body corporate:

(a) that is being wound up; or

(b) in respect of property of which a receiver, or a receiver and manager, has been appointed (whether or not by a court) and is acting; or

(c) that is under administration; or

(ca) that has executed a deed of company arrangement that has not yet terminated; or

(d) that has entered into a compromise or arrangement with another person the administration of which has not been concluded.

13 Section 16(2B) (c) of the Property, Stock and Business Agents Act provides that the Commissioner may exempt a person from the operation of s16(1A)(c) of the Act by certifying that the person took all reasonable steps (while concerned in the management of, or a director of, the body corporate) to avoid the body corporate becoming an externally-administered body corporate.

14 Section 16(2D) of the Act provides that in determining what reasonable steps could have been taken by a person to avoid a particular outcome, the Director-General is to have regard to the steps that could have been taken by the person from the time that the financial difficulties giving rise to the outcome first arose.

Issues

15 It is the role of the Tribunal to make the correct and preferable decision in this matter. In reaching its decision, the Tribunal will consider whether Mrs Dalkic is a fit and proper person to hold a real estate agent’s licence. The Tribunal will also consider whether she is a disqualified person for the purposes of s16(1A)(c) of the Act and if so, whether the Tribunal should exempt her from the operation of s16(1A)(c) by certifying that she took all reasonable steps (while concerned in the management of, or a director of, the body corporate) to avoid the body corporate becoming an externally-administered body corporate.

Evidence

Background

16 This matter is somewhat complex. Between 10 November 2004 and 19 June 2008, Mrs Dalkic was a director of the company, Parker and McCue Real Estate Pty Ltd, which traded as Parker and McCue Real Estate and also as Ray White (Auburn). Since 18 August 2003, the registered office for the company has been at 81 Farnell Avenue, Carlingford. On 3 July 2008, Parker and McCue Real Estate Pty Ltd was placed in receivership and Mr Richard Porter appointed receiver (and later manager) of the company. Injunctions were also issued against Mrs Dalkic and her husband Mr Mustafa Dalkic restraining them from acting as or carrying on the business of real estate agent. Mr Porter continues to manage the company and Mrs Dalkic works with Mr Porter at the business premises doing administrative work.

17 Between 13 January 1997 and 25 January 2009, Mrs Dalkic was a director of Auburn Central Real Estate Pty Ltd, which traded as Auburn Central Real Estate. On 24 November 2006, following application by the NSW Office of Fair Trading, Auburn Central Real Estate Pty Ltd was wound up by the Supreme Court and an administrator appointed. The company was deregistered on 25 January 2009. From 7 February 2000 to 25 January 2009, the company’s registered office was at 56 Auburn Road, Auburn.

18 The Commissioner’s finding, on internal review, that Mrs Dalkic is not a fit and proper person to hold a real estate agent’s licence relates to her involvement with Parker and McCue Real Estate Pty Ltd.

19 The Commissioner found that Mrs Dalkic carried on the business of and acted as a real estate agent at Parker and McCue Real Estate when she was not the holder of a real estate agent’s licence. The Commissioner found that on 8 May, 15 May, 19 May and 20 May 2009, Mrs Dalkic posted advertisements on www.realestate.com without the authority of the manager of the agency, Mr Richard Porter. The Commissioner also found that between March and June 2008, when Mrs Dalkic was a director of the company, Parker and McCue Real Estate Pty Ltd carried on business without a corporation licence.

20 The Commissioner found that Mrs Dalkic was not a fit and proper person to hold a real estate agent’s licence because:

-she had acted as or carried on the business of a real estate agent without holding the required licence under the Act;

-as a director of the company, she had allowed Parker and McCue Real Estate Pty Ltd to act as or carry on the business of a real estate agent without holding the required corporation licence under the Act;

-she had not informed Mr Porter of her actions in taking on new business for Parker and McCue Real Estate Pty Ltd; and

-she had given inaccurate information to a Fair Trading officer about the date that she had arranged to put advertisements back on the website www.realestate.com.au.

21 The Commissioner’s finding, on internal review, that Mrs Dalkic was a disqualified person for the purposes of section 16 of the Act and was not exempt from this provision relates to her involvement with Auburn Central Real Estate Pty Ltd.

22 The Commissioner found that on 24 November 2006, when Auburn Central Real Estate Pty Ltd was wound up by the Supreme Court of NSW, Mrs Dalkic was a director of the company and had been since 31 January 1997. On this basis, the Commissioner found that she was a disqualified person under section 16 of the Act. The Commissioner also found Mrs Dalkic not to be exempt from the provisions of section 16 of the Act.

Evidence before the Tribunal

Auburn Central Real Estate Pty Ltd

Documentary evidence

23 In evidence before the Tribunal is an extract from the Australian Securities and Investment Commission (ASIC) confirming that Mrs Dalkic was a director and secretary of the corporation, Auburn Central Real Estate Pty Ltd from 13 January 1997 to 25 January 2009. The extract also confirms that Auburn Central Real Estate Pty Ltd had an administrator appointed on 24 November 2006 following a court winding up. The administration ceased on 25 January 2009 when the corporation was deregistered.

24 In a letter dated 30 April 2009 Mrs Dalkic’s solicitor, Mr Saba El-Hanania, writes:

In regards to the external administration of Auburn Central Real Estate Pty Ltd whom Mrs Nursen Dalkic was a director at the relevant period, we submit that Mrs Dalkic was not served with the appropriate notice of service and was not personally notified of the liquidation prior to the Company being liquidated...The Originating Process was served upon a Mr Terry Saddick and not Ms Dalkic...Ms Dalkic was not aware of the external administration until a much later date, namely, when Hamilton’s the official liquidators contacted Ms Dalkic late 2007 and this is when Ms Dalkic first became aware of the liquidation of Auburn Central Real Estate Pty Ltd.

25 The affidavit of service dated 3 November 2006 confirmed that the court documents were served not on Mrs Dalkic but on Mr Terry Saddick.

26 In a letter to the respondent dated 25 March 2009, Mrs Dalkic writes:

I have wrote in my affidavit for ADT hearing, that I did not know when the company was being put under liquidation, I can swear on my mothers grave I NEVER WAS AWARE. The company had no creditors except your department for court cost. I would have never liquidated the Company Auburn Central Real Estate Pty Ltd, my family home was under this company which I personally invested my own funds with, when I engaged TressCox Lawyers my request to them was to stop the liquidation, and they said it was too late, I proceeded to pay the liquidators and purchased my own home from the Company.

27 In a statutory declaration dated 11 September 2008, Mrs Dalkic’s husband, Mustafa Dalkic wrote:

I say that since 2003 to late 2007 as my wife was unwell I received all correspondence on behalf of my wife to her address and Auburn Central. I did not want to upset her regarding litigation and I shielded her from litigation matters concerning Auburn Central.

I know now if I had acted more reasonably my wife would not be in the position she is today but in the period from 2003 to late 2007 my primary concern was for her heath.

I did not advise my wife to seek legal assistance in this period from 2003 to date [sic] 2007.

My wife did not become aware of the gravity of the situation until November 2007 when her legal advisors showed her documents obtained from the liquidator.

28 Contained on file is a copy of a letter sent to Mrs Dalkic at Auburn Central Real Estate Pty Ltd by registered mail to Ms Barbara Lu, Legal Officer for the Commissioner for Fair Trading, dated 29 August 2006. A receipt for ‘signature on delivery’ is also contained on file. The letter states as follows:

Re: Commissioner for Fair Trading v Auburn Central Real Estate Pty Ltd Winding up Proceedings

I enclose by way of service, Creditor’s Statutory Demand for Payment of Debt.

The company is required within 21 days after service of this demand:

(a) to pay to the Commissioner for Fair Trading the amount of $9,862.20; or

(b) to secure or compound for the amount of the debt, to the reasonable satisfaction of the Commissioner.

29 A copy of the originating process for the winding up of Auburn Central Real Estate Pty Ltd on the grounds of insolvency advises Auburn Central Real Estate that the application for winding up would be heard in the Supreme Court of NSW on 24 November 2006. An affidavit of service dated 7 November 2006 states that a copy of the originating process was served on Terry Saddick at the registered office of Auburn Central Real Estate Pty Ltd.

30 Nursen Dalkic prepared a lengthy affidavit for the Tribunal hearing. In her affidavit, Mrs Dalkic advised that:

The Court application to wind up the Company Auburn Central Real Estate Pty Ltd, was placed by the Office of Fair Trading in the sum of $9800 owing for the Court Cost. The correspondence and telephone calls were made to Mustafa Dalkic of 56 Auburn Road Auburn and not to my residential address as per above mentioned.

My son, Oktay Dalkic, whom will be referred to as Oktay from here on, and I were the only Directors at the time for Auburn Central Real Estate Pty Ltd and neither of us have ever received any form of correspondence.

The Supreme Court documents were received by Terry Saddick who was at the time employed by Parker & McCue Real Estate Pty Ltd. He would not have known who was Auburn Central Real Estate Pty Ltd and therefore had no authority to accept on behalf of neither Director, nor instructions given to receive documentations on behalf of the company Auburn Central Real Estate Pty Ltd.

Mr Saddick never delivered those papers to me or Oktay. If we had received the documents, both of us would have jumped ship to appear in court to cease the winding of that Company.

When we first heard of the winding of that Company around November 2007, [we] immediately instructed the Law Firm TressCox to act for the Company Auburn Central Real Estate Pty Ltd to cease the winding.

The Company, Auburn Central Real Estate Pty Ltd, liquidated was never in financial difficulties. The directors were not in financial difficulties, if the papers were served properly there would be no winding of that Company.

31 A letter from the lawyers TressCox to Bill Hamilton of Hamilton’s Corpus Pty Ltd dated 13 December 2007 reads as follows:

We act for Nursen Dalkic and Oktay Dalkic, the directors of Auburn Central Real Estate Pty Ltd and are instructed that our clients are indebted to the Department of Fair Trading for the amount of $9,917.20.

Our clients are currently in a position to pay the amount of $9.917.20 and wish to have the liquidation of Auburn Central Real Estate Pty Ltd vacated.

Could you please contact us with a view to resolving this matter and retiring the liquidator?

Oral evidence of Nursen Dalkic

32 Mrs Dalkic gave evidence before the Tribunal that in February 2008, a settlement had been reached in relation to the liquidation of Auburn Central Real Estate Pty Ltd.

33 Mrs Dalkic agreed that in the application she lodged for a real estate agent’s licence in August 2008, she had answered ‘no’ to the question, ‘Are you now, or were you at any time in the preceding 3 years, a director or person concerned in the management of an externally-administered body corporate (within the meaning of the Corporations Act 2001 (Cth)? In answering this question, she told the Tribunal that she had not understood the meaning of the words ‘externally administered’. In her 2009 application for a real estate agent’s licence, she ticked ‘yes’ to the same question, having, in the interim, become aware of the meaning of the words ‘externally administered’.

34 Mrs Dalkic gave evidence that, following the appointment of Mr Porter as receiver and manager of Auburn Central Real Estate Pty Ltd, she had continued to work at the real estate agency. She described her work at the agency under Mr Porter as comprising ‘all the administrative work in the office; taking calls, attending to landlords and tenants and organising repairs.’ She told the Tribunal that she had not been aware that she was prohibited from advertising properties for sale or lease. Once she had been told to remove properties from the website www.realestate.com.au, she had done so.

35 Mrs Dalkic agreed that in May 2005, she had received a visit from the Sheriff who had explained to her that he was writing down items to seize to pay for debts. She also agreed that in May 2005, she had become aware that the Commissioner for Fair Trading was pursuing costs in the Supreme Court matter involving Auburn Central Real Estate Pty Ltd. She told the Tribunal that she had spoken to her husband, Mustafa Dalkic, about this and that he had told her, ‘I’ll look after it, I’ve been arranging to pay by instalments, leave it to me.

36 Mrs Dalkic was shown a document dated 10 June 2005 entitled ‘Statement of Confession: Application for leave to pay judgment debt by instalments.’ The document names Nursen Dalkic as the defendant and states ‘I, the defendant in this action, confess [to] the amount of $9917.20..being the amount claimed by the plaintiff and due to the plaintiff from the defendant in full satisfaction of the plaintiff’s claim’ In the document, Mrs Dalkic applies for leave to pay the unpaid amount of the judgment debt by instalments of $250 commencing on 1 July 2005. In cross examination, Mrs Dalkic denied having seen or signed the document. Documents contained on file disclose that this application to pay by instalments was refused on 8 July 2005.

37 Mrs Dalkic also denied receiving the Creditor’s Statutory Demand for Payment of Debt dated 29 August 2006.

38 When questioned about systems in place at the real estate agency, Mrs Dalkic told the Tribunal that all mail for Auburn Central Real Estate Pty Ltd would be placed in a folder and left at the front desk for each person to access.

Oral evidence of Mustafa Dalkic

39 Mr Mustafa Dalkic gave evidence before the Tribunal. He confirmed that he and his wife had been having marital problems in 2005. He also confirmed that around this time the Sheriff for Bankstown had told him he was looking for Auburn Central Real Estate Pty Ltd and that Mr Dalkic had advised that it was no longer trading.

40 In early 2005, Mr Dalkic said that he had received a visit from Barbara Lu of the Office of Fair Trading in relation to an outstanding debt for Auburn Central Real Estate Pty Ltd of between $9500 to $10 000. Mr Dalkic told Ms Lu that he was not a director of the company and that he should talk directly to Mrs Dalkic.

41 When asked whether he recalled being personally served with the liquidation documents for Auburn Central, Mr Dalkic replied:

Somebody from the office received it and they gave it to me. I opened it. I gave a phone call to Barbara Lu. In late 2005, my son’s marriage was ending. He had a one month old child. I tried to negotiate with Barbara Lu to pay with master card - $5000 now and $5000 in 3 months. She said, ‘I’ll make sure I’ll clean you of all you have got.’ I said I would give her $5000 in cash and would give her the rest in three months time. Nursen hadn’t been told by me about the $9500 for Auburn Central. She was very busy and very worried about the baby. When I received the letter, there was a summons for the Supreme Court. I received a document from the Supreme Court and I opened it. I saw Court papers and I rang Barbara Lu and said I wanted to settle the matter by instalments.

42 Mr Dalkic told the Tribunal that he did not show the Court documents to Mrs Dalkic:

She was going through a hard time. If I showed her the documents, she would crack. So I wanted to pay myself, I offered $5000 straight up and $5000 in 3 months...I tried to rectify the problems for Nursen.

43 Mr Dalkic gave evidence that he had received the affidavit of service for the documents but that he did not know what winding up meant and had not given the affidavit of service to Mrs Dalkic.

Oral evidence of Mr Hutchins

44 Mr Hutchins, from the Office of the Sheriff, gave evidence that on 7 September 2009, Mr Dalkic had approached him and introduced him to Mrs Dalkic, saying, ‘This is my wife. Do you remember meeting her?’ Mr Hutchins said that he couldn’t remember meeting her. Mr Hutchins told the Tribunal that he had met Mr Dalkic on several occasions but that he couldn’t remember meeting Mrs Dalkic. He was doubtful that he would remember her if he had only met her on one prior occasion.

45 In cross examination, Mr Hutchins was referred to a Notice of Non-levy which stated that he had spoken to Nursen Dalkic on 22 February 2005.

46 The Notice states in part as follows:

Execution attempted at 56 Auburn Rd, AUBURN NSW -2144, on 22 February 2005.

Informed by Nursen Dalkic Principal of Parker and McCue Real Estate who occupy the given address, all registrations and licences sighted that debtor company is not known at given address. No goods found belonging to debtor company on which to levy.

47 Mr Hutchins gave evidence that he would have taken handwritten notes of the meeting which would then have been typed up later that day either by Mr Hutchins himself or a typing officer. The procedure would then be for a copy of the record to be sent to the creditor and a second copy to be kept on file.

48 In re-examination, Mr Hutchins agreed with the proposition that anyone could have told him they were Nursen Dalkic, whether they were male or female and confirmed that general no identification is required upon service of documents.


Parker & McCue Real Estate Pty Ltd

Documentary evidence

49 An extract from the Australian Securities and Investment Commission’s database confirms that Mrs Dalkic was a director of Parker & McCue Real Estate Pty Ltd from 10 November 2004 to 19 June 2008 and then from 5 September 2008 (and current as at 31 August 2009).

50 According to the ASIC database, Parker and McCue Real Estate Pty Ltd held a corporation licence from 22 August 2003 to 18 December 2007. On 25 March 2008, an application by Parker and McCue Real Estate Pty Ltd for a corporation licence was refused. According to the Business Names register, the business name Ray White (Auburn) was registered to Parker and McCue Real Estate Pty Ltd from 31 May 2007 to 8 April 2008.

51 On 9 July 2008, the Supreme Court of NSW issued injunctions against Mrs Dalkic restraining her from acting as or carrying on the business of real estate agent. Injunctions were also issued against Mrs Dalkic’s husband, Mr Mustafa Dalkic, and against Parker and McCue Real Estate Pty Ltd. On 9 July 2008, the Supreme Court also appointed Richard Porter as receiver of Parker and McCue Real Estate Pty Ltd. On 15 August 2008, Mr Porter was appointed manager of Parker and McCue Real Estate Pty Ltd.

52 In evidence is an affidavit by Mr John Mildwater of the NSW Office of Fair Trading sworn on 3 July 2008. According the affidavit, on 7 May 2008, Mr Mildwater attended the business premises of Parker and McCue Real Estate and found the office to be open for business although it held no corporation licence at the time. Mrs Dalkic and Mr Mustafa Dalkic, neither of whom held real estate licences at the time, were on the premises at the time of Mr Mildwater’s attendance. Mr Mildwater conducted an inspection of the trust account records and found recent transactions. On 13 May 2008, Mr Mildwater returned to the premises of Parker and McCue Real Estate Pty Ltd and took photographs showing the office to be open for trading and advertising properties for sale. Copies of these photographs are contained on file. At the time of the visit, Parker and McCue Real Estate Pty Ltd did not hold a corporate licence.

53 A search of www.realestate.com.au by the respondent on 12 March 2009, 24 April 2009, 11 June 2009 and 19 June 2009 found properties listed by Parker and McCue Real Estate Pty Ltd (trading as Ray White (Auburn)) advertised on the site. On each of these dates, according to the NSW Office of Fair Trading, Parker and McCue Real Estate Pty Ltd did not hold a corporation licence. On each of these dates, Mrs Dalkic was a director of Parker and McCue Real Estate Pty Ltd. Copies of the advertisements on www.realestate.com.au are contained in the s58 documents for this matter.

54 On 7 May 2009 and 13 May 2009, Mr Mildwater found the premises for Parker and McCue Real Estate open for business. On each of these dates, the NSW Office of Fair Trading confirms that Parker and McCue Real Estate Pty Ltd did not hold a corporation licence. ASIC records confirm that on each of these dates, Mrs Dalkic was a director of Parker and McCue Real Estate Pty Ltd.

55 On 8, 15, 19 and 20 May 2009, officers from the NSW Office of Fair Trading found advertisements by Parker and McCue Real Estate posted on the website www.realestate.com.au.

56 When approached about the matter, Mr Porter said that he was unaware of these advertisements being placed on the website www.realestate.com.au.

57 An email annexed to Mrs Dalkic’s affidavit from realestate.com.au dated 22 May 2009 to info@parkermccue states as follows:

I am writing to advise your office that your account with realestate.com.au has been suspended effective immediately, under instruction from the Office of Fair Trading. Documentation has been supplied by Fair Trading from the Supreme Court advising of a trading injunction against your company.

The orders restrain the defendants from carrying on etc the business of real estate whilst not holding a licence or certificate of registration as real estate agents under the Property Stock and Business Agents Act 2002 (NSW). This includes the advertisement of properties for sale or rent.

58 A file note dated 8 May 2009 by John Mildwater, investigator with the NSW Office of Fair Trading, refers to a conversation with Mr Richard Porter and states, in part:

Mustafa Dalkic has had no involvement in real estate activity according to Mr Porter. He has however been at the office from time to time. He said that as Mustafa owns the building which houses the office, it is impractical to seek to prevent him being there.

59 Annexed to Mrs Dalkic’s affidavit dated 23 August 2009 are references by Mohammed Hussein Waniya, Peter Stokes, Ian Collyer, Simon Kendall and Arzu Agacayak. The references are dated between September and October 2008 and attest to the good character of Mrs Dalkic. None of the references make reference to the matters before this Tribunal.

60 In a letter to the respondent dated 17 June 2009, Mrs Dalkic wrote:

Around 8th May 2009 nearly 10 months later, ...I received a call from Mr John Mildwater to remove advertisement from Real Estate.com on the internet, I said okay but I was very confused. Mr Richard Porter telephoned to say to remove the advertisement. I remove the advertisement, very next day a Vendor rang the office and said that our advertisement have been removed from the site and wanted an explanation. This site and the company has 12 month contract prepaid each month by the company (no fee for advertisement charged to vendor). I was not able to handle numerous phone complaints, the vendors were harsh with words, then I asked my son Oktay to come down and put only some of the advertisement back up.

Oral evidence by Nursen Dalkic

61 In oral evidence before the Tribunal, Mrs Dalkic confirmed that she first held a real estate agent’s licence in 1996 and that she had been disqualified from holding a real estate agent’s licence in 2003. In 2005 and 2006, she was successful in gaining a further real estate agent’s licence. In December 2007, she was advised that her application for an individual and corporate real estate agent’s licence had been refused.

62 She spoke of marital problems with her husband over 2004 and 2005, during which time she had been suffering from depression.

63 Mrs Dalkic confirmed that in May 2009 she had received a phone call from John Mildwater of the Office of Fair Trading advising her that she shouldn’t be advertising properties for Parker and McCue Real Estate. Mrs Dalkic told the Tribunal that she had then removed the advertisements. Further advertisements subsequently appeared after the website had crashed, causing the deleted advertisements to re-appear.

Oral evidence of Richard Porter

64 Mr Richard Porter gave evidence that he was appointed manager of Parker and McCue Real Estate Pty Ltd in 2008 which entitled him to operate the agency and for Mrs Dalkic to assist him by monitoring the rent roll and book keeping. He confirmed that under his administration, properties were not to be advertised by the agency and that Mrs Dalkic was not allowed to sell properties. He told the Tribunal that Mrs Dalkic took care of the book keeping for the company and that he had no complaints about her work in this regard.

Oral evidence by John Mildwater

65 Mr Mildwater gave evidence before the Tribunal. He told the Tribunal that on 8 May 2009, he saw advertisements by Parker and McCue Real Estate listed on www.realestate.com. He made enquiries of the manager, Mr Porter, and referred him to the advertisements. Mr Porter told him that he hadn’t been aware of the advertisements. Mr Mildwater asked Mr Porter to contact Mrs Dalkic and to remove the advertisements. Mr Mildwater then gave evidence that he had checked the website and found the ads removed.

66 On 20 May 2009, Mr Mildwater saw further advertisements by Parker and McCue Real Estate and telephoned Mr Porter who said he didn’t know anything about the advertisements. When Mr Mildwater attended the real estate agency, he approached Mrs Dalkic who said to him that she had arranged to place the advertisements and that she hadn’t told Mr Porter she had done so. Mr Mildwater then spoke to an employee of www.realestate.com and advised him that there was a court injunction against Mrs Dalkic and that she wasn’t allowed to put advertisements up on the website.

67 Mr Mildwater told the Tribunal that under Mr Porter’s terms of appointment, he was instructed not to take on any new business and to wind the business down with a view to its sale.

Submissions

Applicant’s submissions

Parker and McCue Real Estate Pty Ld

68 On behalf of Mrs Dalkic, Mr El-Hanania submitted that after Mr Porter had been appointed as receiver and manager of Parker and McCue Real Estate Pty Ltd on 9 July 2008, at a meeting attended by Mr Mildwater, Mr Porter and Mrs Dalkic on 10 July 2008, the agreement was that ‘the business was to continue as usual.’ According to Mr El-Hanania, Mr Porter had not received any written instructions from the Department of Fair Trading, only worked on an hourly rate and never stated that he was to sell the business.

69 Mr El-Hanania submitted that ‘the applicant had at no period after the 9 July 2008 orders acted as a licensed real estate person as she was under the direct control and instructions of Mr Porter who was the licensed real estate agent and he was aware of the sales and the rental given that he was the receiver and manager.’

70 In relation to the advertisements appearing in May 2009, Mr El-Hanania submitted that ‘this is a grey area given that Mr Porter did not have clear instructions of the remuneration apart from the hourly rate’. He submitted that Mrs Dalkic took out the advertisements as soon as she was told to do so by Mr Porter. Their later re-appearance was, according to Mr El-Hanania, due to technical problems with the website.

Auburn Central Real Estate Pty Ltd

71 In relation to Mrs Dalkic’s non-disclosure in her 2007 renewal application that she had been a director of a corporation under external administration, namely Auburn Central Real Estate Pty Ltd, Mr El-Hanania submitted that Mrs Dalkic had simply not understood the meaning of ‘externally administered.’ According to Mr El-Hanania,

Nursen’s knowledge of such technical matters has to be judged against the standard of ordinary real estate agents in good repute, and not this of a lawyer. It is submitted that an ordinary real estate agent of good repute would not understand the fact that technically liquidation is included in the meaning of externally administered.

72 Mr El-Hanania notes, in support of Mrs Dalkic’s honesty, that she answered ‘yes’ to the same question in her 2009 application. According to Mr El-Hanania, ‘This was after she received legal advice on this point from Saba El-Hanania of this firm, when completing her 2009 application she then understood that externally administered included liquidation’. Mr El-Hanania submitted that Mrs Dalkic never attempted to deliberately mislead the Office of Fair Trading with the 2007 application.

73 Mr El-Hanania submitted that Mrs Dalkic had taken all reasonable steps to avoid Auburn Central from being wound up. He submitted that Mrs Dalkic had had no knowledge of the winding up proceedings and only found out about the liquidation after it had occurred. Mr El-Hanania submitted that had Mrs Dalkic known about the winding up proceedings prior to the liquidation, she would have made arrangements to pay the debt of $9862.20 which she had the capacity to do. Mr El-Hanania submitted that the evidence was that communication with the NSW Office of Fair Trading about the debt had taken place with Mr Dalkic and not with Mrs Dalkic.

Respondent’s submissions

Parker and McCue Real Estate Pty Ltd

74 Mr Coss submitted that Mrs Dalkic, as a director of Parker and McCue Real Estate Pty Ltd, allowed the company to continue to trade despite its application for a corporation licence having been refused on 25 March 2008. This included advertising properties for sale on www.realestate.com.au on 24 April 2008, 7 May 2008, 11 June 2008 and 19 June 2008. Mr Coss submitted that Mr Porter had been unaware of the sale properties and had asked Mrs Dalkic to remove them as soon as he had been made aware of them. Mr Coss referred to the evidence of Mrs Dalkic that she had told her son, Oktay Dalkic, to put the advertisements back on the site and that she had stated in evidence that she had done this because her vendors had wanted her to advertise and that she did not tell Mr Porter that she had replaced the advertisements. According to Mr Coss, Mrs Dalkic was thereby attempting to introduce new business without authority.’

Auburn Central Real Estate Pty Ltd

75 Mr Coss submitted that despite her evidence, Mrs Dalkic would have been aware of the winding up proceedings in relation to Auburn Central Real Estate Pty Ltd. He submitted that her concern would have been raised by her conversation with the Sheriff on 20 April 2005 when he attempted to seize her motor vehicle and told her that ‘it concerned money owing to the Office of Fair Trading.’ He also stated that Mrs Dalkic had confessed her debt in the Statement of Confession dated 10 June 2006. He also referred to the Notice of Non Levy documenting an apparent exchange between Mr Hutchins and Mrs Dalkic on 22 February 2005. On the basis of this evidence, Mr Coss submitted that Mrs Dalkic would have known that the administration of Auburn Central Real Estate Pty Ltd was a possibility upon receipt of the registered post on 29 August 2006. On the basis of this evidence, he submitted that Mrs Dalkic did not take reasonable steps to avoid the external administration of Auburn Central Real Estate.

76 In response to Mrs Dalkic’s evidence that the system for mail collection at Auburn Central Real Estate was simply that there was a folder and each person simply went and got their documents from the folder, Mr Coss submitted that Mrs Dalkic’s failure to have appropriate systems in place was a further indication that she is not a fit and proper person to hold a real estate licence.

77 Mr Coss made the following further submissions:

Even if it was to be accepted, that the Applicant was unaware of Auburn Central Real Estate being wound up...she was still a Director of that company. There are certain obligations on her as a Director. This is a protective jurisdiction. There has been no evidence that the Applicant understands her responsibilities. There has been little evidence of what systems are in place. There is no evidence of what steps the Applicant would take...to ensure what had happened doesn’t happen again.

78 Mr Coss submitted that Mrs Dalkic is not a fit and proper person to hold a real estate licence because she has been dishonest in relation to the debts of Auburn Central Real Estate, has continued to trade whilst unlicensed and attempted to introduce new business whilst under external administration. He submitted that she does not have the requisite ability to be found to be fit and proper because of her inability to install adequate systems at work for mail and other procedures to enable her to be aware of what is going on with the business.

79 Mr Coss raised concerns about Mr Dalkic’s continuing involvement in the business despite the fact that he does not hold a real agent’s licence.

80 Mr Coss submitted that:

In the absence of any evidence given on behalf of the Applicant to the effect that she is a person of good fame and character, there is no evidence that she is a person of good fame and character. There are some testimonials but not one of them is aware of the liquidation of Auburn Central Real Estate and her role, the applicant trading unlicensed nor the applicant being unable to control her husband.

FINDINGS

81 Mrs Dalkic has asked the Tribunal to review the decision of the Commissioner dated 30 June 2009 which, on internal review, affirmed the decision of 21 May 2009 to refuse to grant Mrs Dalkic a real estate agent’s licence under the Property, Stock and Business Agents Act 2002. Mrs Dalkic’s application for a real estate agent’s licence was refused on the basis that she was found not to be a fit and proper person to hold a licence. She was also found to be a disqualified person under the Act.

82 In reaching my decision in this matter, I have considered:

a. Whether Mrs Dalkic is a disqualified person within the provisions of s16 of the Act; and

b. Whether Mrs Dalkic a fit and proper person to hold a real estate agent’s licence.

Is Mrs Dalkic a disqualified person?

83 As stated above, section 16(1A) of the Act provides that a person is a disqualified person if, within the last three years, they were a director of an externally-administered body corporate. Under the Corporations Act 2001, an externally-administered body corporate includes a body corporate that is being wound up, is under administration or has a receiver and/or a manager appointed to it.

84 On the basis of extracts from the Australian Securities and Investment Commission (ASIC), I am satisfied that Auburn Central Real Estate Pty Ltd had an administrator appointed to it on 24 November 2006 following a court winding up and that the administration ceased on 25 January 2009 when the corporation was deregistered. On this basis, I am satisfied that Auburn Central Real Estate Pty Ltd was an externally-administered body corporate between 24 November 2006 to 25 January 2009. On the basis of ASIC records contained on file, I accept that Mrs Dalkic was a director of Auburn Central Real Estate Pty Ltd from 13 January 1997 to 25 January 2009. For these reasons, I am satisfied that as Mrs Dalkic was, within the last 3 years, the director of an externally-administered body corporate, she is a disqualified person under the provisions of s16(1A) of the Act.

Is Mrs Dalkic exempted from the provisions of s16(1A) of the Act?

85 The Commissioner (and on review, the Tribunal) may exempt a person from the operation of this section by certifying that the person took all reasonable steps to avoid the body corporate from becoming externally-administered, having regard to the steps that could have been taken by the person from the time that the financial difficulties that gave rise to the outcome first arose.

86 In Saglimbeni v Commissioner for Fair Trading, NSW Office of Fair Trading [2008] NSWADT 1 Montgomery JM considered these provisions. He referred to a number of earlier decisions of the Tribunal (Clarke v Commissioner for Fair Trading [2004] 273; Davidson v Commissioner for Fair Trading [2004] NSW ADT 200; McDonald v Commissioner for Fair Trading [2004] NSW ADT 124; Smith v Commissioner for Fair Trading [2004] NSW ADT 182 and Cross v Commissioner for Fair Trading, Office of Fair Trading [2005] NSWADT 69) dealing with the questions of whether reasonable steps have been taken to avoid bankruptcy or insolvency.

87 Montgomery JM agreed with and applied the approach set out by the Tribunal’s President, O'Connor DCJ, in Clarke, when his Honour reviewed the approach taken in the earlier cases. The President said, at [10-11]:

"10 [The Tribunal] has expressed the following views as to the approach to be taken in examining the question of whether the licence holder took ‘reasonable steps’ to avoid the bankruptcy or insolvency:

(i) A general inquiry into the wisdom or otherwise of the original financial dealings that ultimately ended in bankruptcy or insolvency is not contemplated by the Act. The point at which the inquiry commences is when the applicant was ‘faced with the possibility’ of bankruptcy or insolvency (Davidson at [20]) or was ‘aware’ or ‘should have been aware’ (McDonald at [21]) of that possibility. The focus is the steps taken to avoid the relevant event (see Smith at [17]) – in cases of the present kind, administration, and later liquidation.

(ii) Subject to (i), in assessing reasonableness the Tribunal must examine all the relevant facts and circumstances. (McDonald at [25]),

(iii) The steps taken by the applicant must be objectively reasonable in the sense that they would be those taken by a ‘reasonable person endowed with the knowledge and experience of the [applicant]’. (McDonald at [26-27])

11 To these should probably be added a fourth, though it is obvious enough from the provision:

(iv) The person under notice has the task of satisfying the Commissioner that he or she took all reasonable steps to avoid the insolvency."

88 In Saglimbeni v Commissioner for Fair Trading, NSW Office of Fair Trading [2008] Montgomery JM concluded that, in order to determine whether all reasonable steps to avoid the body corporate becoming an externally-administered body corporate had been taken from the time that the financial difficulties that gave rise to the outcome first arose, he had to determine three issues. First, when the applicant knew, or ought to have known, that the external administration in question was a possibility? Secondly, to determine what steps they took to avoid the external administration and, thirdly, what steps a reasonable person endowed with their knowledge and experience ought to have taken to avoid that outcome? I agree with that approach.

When did Mrs Dalkic know, or ought she to have known, that external administration in question was a possibility?

89 On the evidence before me, I am satisfied that Mrs Dalkic has been truthful in her evidence that she only became aware of the winding up proceedings against Auburn Central Real Estate Pty Ltd towards the end of 2007.

90 In making this finding, I am satisfied that Mrs Dalkic did not receive the letter from Barbara Lu of the NSW Office of Fair Trading dated 18 July 2006 requesting Mrs Dalkic to forward a bank cheque of $9779 to the Office of Fair Trading in order to avoid the commencement of winding up proceedings against the company. I accept the evidence given by Mr Dalkic that he deliberately withheld all documents about the winding up from Mrs Dalkic in an attempt to manage the matter himself.

91 Nothing in the evidence produced by the respondent satisfies me that Mrs Dalkic had knowledge of the winding up proceedings before the end of 2007 when she was first contacted by the liquidators of Auburn Central Real Estate Pty Ltd.

92 In making this finding, I have taken into account evidence by Mrs Dalkic that had she known about the proceedings, she would have settled the amount, which was not a large sum of money, and which was an amount she would have been able to raise. I accept this evidence particularly in light of the fact that by not paying the requested amount of $9862.20, Mrs Dalkic risked losing her family home. I accept that she would not have jeopardised her home willingly and only found herself in this situation because she was unaware of the commencement of the proceedings to liquidate Auburn Central Real Estate Pty Ltd.

What steps did Mrs Dalkic take to avoid the external administration?

93 I accept Mrs Dalkic’s evidence that as soon as she was made aware of proceedings to liquidate Auburn Central Real Estate Pty Ltd, she instructed the law firm, TressCox Lawyers, to stop the liquidation. I accept Mrs Dalkic’s evidence that TressCox Lawyers advised her that it was too late to stop the liquidation and proceeded to act for her to recover her family home from the company.

What steps would a reasonable, informed person in Mrs Dalkic’s situation have taken to avoid the external administration?

94 I am satisfied that a reasonable, informed person in Mrs Dalkic’s situation would have taken similar steps to avoid the situation: namely to seek legal advice as soon as she had become aware of the situation.

Conclusion

95 On the evidence before me, I am satisfied that, with the late knowledge she had, Mrs Dalkic took all reasonable steps to avoid Auburn Central Real Estate Pty Ltd becoming an externally-administered body corporate and that she is therefore exempt from being a disqualified person under the provisions of section 16 of the Act.

Is Mrs Dalkic a fit and proper person to hold a real estate agent’s licence?

96 The meaning of the phrase ‘fit and proper person’ was discussed by the High Court in Hughes & Vale Pty Ltd v New South Wales (No 2) [1955] HCA 28; (1955) 93 CLR 127, at [9], where Dixon CJ, McTiernan and Webb JJ said:

The expression ‘fit and proper person’ is of course familiar enough as traditional words when used with reference to offices and perhaps vocations. But their very purpose is to give the widest scope for judgment and indeed for rejection. ‘Fit’ (or ‘idoneus’) with respect to an office is said to involve three things, honesty knowledge and ability: ‘honesty to execute it truly, without malice affection or partiality; knowledge to know what he ought duly to do; and ability as well in estate as in body, that he may intend and execute his office, when need is, diligently, and not for impotency or poverty neglect it.’

97 The meaning of the phrase was also discussed in Australian Broadcasting Commission v Bond [1990] HCA 33; (1990) 170 CLR 321, where Toohey and Gaudron JJ said at [36] of their judgment:

The expression ‘fit and proper person’, standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of ‘fit and proper’ cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur.

98 As their Honours recognised, at [66], whether a person is a fit and proper person involves a value judgement to be made in the context of the particular activity to be licensed.

99 In McBride v Walton (NSW Court of Appeal, unreported, 15 July 1994), the Court said where there is evidence of misconduct, there should be consideration of any explanation for that misconduct, its seriousness to the particular activity, the motivation of the person, whether the misconduct is an isolated incident, the person’s underlying qualities of character, and the person’s conduct since the incident and whether this demonstrates recognition of the misconduct and subsequent reform.

100 In Frugtniet and Anor v Commissioner for Fair Trading; Commissioner for Fair Trading v Travel Action Pty Ltd and Anor (GD) [2004] NSWADTAP 12 (16 April 2004) at [209] the Appeal Panel summarised the principles involved in assessing fitness and propriety, derived from the Commercial Tribunal’s decision in Young Taek Chong v Tomazin (1994) ASC 56-283 at 58:

‘the question must be determined with reference to the particular purposes of the regulatory regime involved; .. account must be taken of the minimum standards of the profession or occupation being regulated; that matters such as ‘character’, ‘suitability’, ‘integrity’ and ‘trustworthiness’ – indeed, ‘any aspect of fitness or propriety that is relevant to the public interest’ – must be considered; that while an isolated act may suffice to show lack of fitness and propriety, this will not necessarily be the case, and ‘deliberate prolonged conduct or a course of conduct’ stands on a different footing; and finally that ‘the evaluation of fitness involves a wide discretion’

101 I find that, on several occasions, Mrs Dalkic carried on business as a real estate agent when she did not hold a real estate agent’s licence to do so and when Parker and McCue Real Estate Pty Ltd did not hold a corporate licence entitling the company to trade as a real estate agency. I accept the evidence contained in the affidavit of Mr Mildwater dated 3 July 2008 that on 13 May 2008, 27 May 2008 and 4 June 2008, Mr Mildwater found the premises of Parker and McCue Real Estate Pty Ltd open for business and Mrs Dalkic in attendance there. I accept that on these dates, Parker and McCue Real Estate Pty Ltd did not hold a corporate licence and that Mrs Dalkic did not hold a real estate agent’s licence. I also accept the evidence contained in Mr Mildwater’s affidavit that on 24 April 2008, 11 June 2008 and 19 June 2008 properties were advertised on www.realestate.com by the company. I accept that on these dates, Parker and McCue Real Estate Pty Ltd did not hold a corporate licence.

102 I find that, as a director of the company at this time, Mrs Dalkic acted improperly in allowing the company to open for business whilst being unlicensed and in allowing advertisements to be placed on www.realestate.com.au.

103 On the basis of the Supreme Court documents contained on file, I am satisfied that Mr Richard Porter was appointed as manager of Parker and McCue Real Estate Pty Ltd on 15 August 2008 and that Mrs Dalkic was then employed to undertake administrative duties at Parker and McCue Real Estate Pty Ltd under the direction of Mr Porter.

104 I further find that between 8 and 20 May 2009, when she did not hold a real estate agent’s licence, Mrs Dalkic posted advertisements on the website www.realestate.com.au. In her own evidence, Mrs Dalkic agreed that she acted contrary to the directions of Mr Porter when, having removed advertisements from the website, she put some back up following complaints from vendors. I find that in doing this, she was not acting under the authority of Mr Porter.

105 This is in breach of section 8(1)(a) of the Act which prohibits a person from acting as or carrying on the business of a real estate agent unless they hold a real estate agent’s licence. It is important for the public to be able to assume that a person who is holding themselves out to be a real estate agent, which includes dealing with the sale and lease of properties and the management of substantial amounts of money, is in fact licensed to act as such. Holding oneself out to be a real estate agent or undertaking duties that are only to be undertaken by a real estate agent without being licensed to do so is improper and dishonest conduct that impacts upon the applicant’s fitness to hold a real estate licence.

106 Character references in support of Mrs Dalkic have been put in evidence. I have, however, given limited weight to these references on the basis that they do not refer to the proceedings before this Tribunal and so I cannot be satisfied that in writing the references, Mrs Dalkic’s referees were aware of the proceedings or of the fact that she has been refused a real estate agent’s licence.

107 I accept that Mrs Dalkic has been beset with personal problems over the past few years which have affected her health. It is possible that these may have had an impact on her actions over the past few years and that, in the future, she may again be able to demonstrate that she is a fit and proper person to hold a real estate agent’s licence. At this stage, however, in the light of her continued actions in carrying out the work of a real estate agent and holding herself out as a real estate agent while unlicensed, I am not satisfied that she is a fit and proper person to hold a real estate agent’s licence.

ORDER

108 The Commissioner’s decision is affirmed.